Do I pay Sales and Occupancy Tax on cleaning fees?

[Sean Wilt]

I know I will have gross revenue from rentals for income tax purposes which would include cleaning fees collected.  For income tax purposes, I know I can deduct the actual cleaning costs so that portion of revenue becomes essentially non-taxable.

My assumption is that I would NOT have to pay sales tax and/or hotel/motel tax on cleaning fees collected.  I'm sure there is likely is no way for local jurisdictions to police that anyway, but I want to do the right thing.  So, I plan to pay sales and occ taxes on the rental fee only, NOT the cleaning fee collected.

Am I right here?

[Sean Wilt]

Thanks @Jon Crosby and @Chris Neal.   I guess that makes sense, but it feels like I would be paying tax on revenue with no chance to take a corresponding deduction, in essence over paying these particular taxes.

If I treat cleaning fees as pass throughs (which I do), I may collect say $10k in cleaning fees over the course of the year, immediately pay them out to our cleaning service so in effect net $0.... but in this scenario, I would owe 13% tax (in my area) or $1,300 in tax on revenue that was not really income.  

Guess that's why there are CPAs.. :)... I will do some more digging.

Thanks for replying.  Happy New Year.